The total value of new business conducted across the consumer finance space increased by 11% in July compared to last year, new figures published by the Finance & Leasing Association (FLA) have shown.

In the first seven months of 2022, this means that new business was 22% higher than in the same period last year.

FLA members in the consumer finance sector include banks, credit card providers, store card providers, second charge mortgage lenders, personal loan and instalment credit providers, as well as motor finance providers.

According to the FLA data, a total £9.55bn of new consumer finance business was recorded by the FLA in July. The credit card and personal loan sectors together reported new business up by 16% in July compared with the same month last year, while the retail store and online credit sector reported new business growth of 7% over the same period.

Director of research and chief economist at the FLA, Geraldine Kilkelly, commented: “The consumer finance market has seen a strong recovery so far this year as the UK economy emerged from the pandemic, but the overall value of outstanding consumer credit contracts at the end of July remained 9% lower than in February 2020.  

“With household incomes under increasing pressure from the challenges of a high inflationary environment, the consumer finance market is in a strong position to meet demand for credit over the coming months, while providing targeted support to those customers who may need it.

“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.” 

In the second charge mortgage sector, the FLA also reported £146m worth of new business for July, a figure that was a 45% increase on the same month last year.

Commenting on these figures, director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, added: “In July, the second charge mortgage market reported its highest monthly new total for new business volumes since September 2008. Of the total new agreements written in July, 54% were for the consolidation of existing loans, 15% for home improvements, and a further 26% were for both loan consolidation and home improvements.

“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”

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